Monday, March 29, 2021

A Consensus Of Implosion

Not only are gamblers all on the same side of the boat, but just as they were in 2008, the award winning financial media are on the same side of bullshit. Something about corporate owned media is not leading to truth in financial journalism...

The burden of truth in stock markets is always on those who tell the truth. For the rest there are specious narratives and tall tales of gold in them thar hills. Nothing captures the imagination more than shared speculation and the expectation for a massive profit. It's true that greed is blindness, and this society is now flying blind straight into the ground.


Having started investing in the early 1990s, what I came to realize is that those who place their faith in these continuously bailed out markets and the people running them, will inevitably wake up to massive unexpected losses. Do that a couple of times in a row and it starts to lose its appeal. Among the reasons I turned skeptical on central bank manipulated markets is because I had lost trust in Wall Street. Secondly, because I wanted control over my level of risk. Third because I wanted no part in officially sanctioned pump and dump schemes, and lastly because I knew this experiment would continue just long enough to implode everyone who believed in it. What Reddit is doing to Millennials, central banks are doing to Boomers - luring them into a big pump and dump scheme with no exit. Both schemes, officially sanctioned by Congress. The media are just there to facilitate the process and make sure no one gets away.

Unfortunately, these markets and the "award winning" financial journalists covering them, have been entirely cleaved from economic reality. They are now running almost entirely on combined fiscal and monetary stimulus at 27% of GDP. They are fully drugged by the virtual simulation of prosperity and its acolyte QE.

Now we are seeing the exact same Wall Street con job being run against the Millennials. They are the ones now setting the high bar for the ludicrous narratives they are willing to believe, and they are already paying the price for it in margin calls in Reddit pump and dumps, pot stocks, Ark ETFs, SPACs, IPOs, Cloud internets, Chinese stocks, and Biotech. Those investing side by side with that generation are implicitly sharing the same false narratives and hence embracing the same risks of full scale implosion. So far the damage has been limited to the more speculative sectors, but the rot is spreading week by week. What Millennials don't know and haven't been told by anyone, is that they came very late to the party. In fact, this cycle is deja vu of the 1990s when the Tech bull market grew over the course of the decade and only went vertical at the very end of the cycle. The length of the final vertical melt-up ~1 year is virtually identical in both cases. We were told the exact same lie twenty years ago. The longest cycle in U.S. history, would last forever. 

The current abiding narrative is that a new bull market started a year ago after a 16 day bear market - the shortest in history, which corrected the longest bull market in history 11 years, therefore this is still early days for record overvaluation in a post-pandemic obliterated economy. In order to take this view one must either have dementia, total ignorance of history, or as is more common these days complete and total faith in central bank alchemy. Today's mainstream financial sites provide sufficient conflicting opinion to provide plausible deniability for those who seek this latest cozy consensus of unforeseen implosion.

Today's financial media has conflated diversity of opinion with objectivity. What we have right now is rampant conflict of interest coursing through the financial media under the guise of responsible journalism. There is nothing responsible about it.

One of the regulations that should have arisen from the 2008 disaster is that Wall Street which makes its primary income from selling stocks and bonds, should not be permitted to publish their market views in public media and on Zerohedge. Because they can't be trusted. They have an extreme conflict of interest and we are watching it play out yet again in real-time on a Madoff-inspired scale.

Currently these "award winning" financial sites are selling Wall Street bullshit like it's AAA rated subprime bonds in 2008 and the liquidations have already started. 

"Late last week, Morgan Stanley, Goldman Sachs Group and Deutsche Bank unloaded large blocks of shares in Viacom CBS, Discovery and other companies as part of the liquidation of positions by Archegos Capital Management. The sales approached $30 billion in value, people familiar with the matter said, and led to stocks in those companies plummeting. Market participants called the size and speed of these sales unprecedented."

Make no mistake, the regulations are coming and they will not be accretive to corporate profit.